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Government-Related Customers in China to Spend Over US$42.8 Billion on IT, finds Springboard Research

Published On: 3/14/2011
Geography: Greater China
Technology: General IT Market,Vertical Markets

Beijing, March 14, 2011 – Government-related customers in China, comprising of state-owned enterprises, government bodies and healthcare & education customers, are estimated to spend over US$42.8 billion on IT, which represents 43.7% of total IT spending in mainland China, finds the latest report “IT Buying Behavior Study of Government-related Customers - China” by Springboard Research, a leading innovator in the IT market research industry.

“Government-related customers will drive IT procurement in the coming years and will have deep pockets for IT investment, boosted by heavy government spending to turn the economy around after the global financial crisis”, noted Mr. Gene Cao, Senior Research Analyst for IT Services, China at Springboard Research. “This trend can be majorly attributed to the launch of several national information system development plans, including Golden Taxation Phase III, Golden Customs Phase IV, and SG186”, Mr. Cao added.

The Springboard Research report found online media to be the primary information source for IT products, as cited by around 50% of the respondents. Search engines, IT forums and BBS significantly influence respondents during brand selection in the bidding stage. Apart from online media, government respondents are also receptive to information from sales representatives.

State Owned Enterprises (SOE) have the largest market opportunities for IT vendors 

According to the report, SOEs have the largest installed base of IT products from global vendors. In addition, they have higher IT spending and their procurement cycles are relatively shorter, in comparison to government bodies and healthcare & education customers.

The report further noted that 60% of the SOE respondents had over US$ 1.5 million of IT budget in 2010 and the category offers the maximum market opportunities to the IT vendors. A quarter of the SOE respondents also affirmed that they refresh their IT products every 6 months.

Policies influence government bodies in vendor selection  

A high percentage of respondents (44%) mentioned that there are policies in place to encourage them to buy local products/solutions using the same or similar purchasing criteria and another 35% of respondents showed preference for local offerings, although there are no relevant policies in their organizations.

“Tight controls on foreign product procurement are expected to continue in China, but at a slower pace. Nonetheless, global vendors have an opportune period to expand business within suitable product lines and well delivered support services”, said Rita Xia, Associate Research Analyst, China at Springboard Research. “The global vendors are advised to build good relationships with large government accounts and deliver products with high performance and reliability”, added Ms. Xia.


About this Report

The Springboard Research report - “IT Buying Behavior Study of Government-Related Customers - China” - provides a comprehensive overview of IT procurement in the government-related market in China, with a focus on how new policies to foster local innovation and limit IT procurement from foreign IT suppliers impacts each customer segment. Moreover, this report provides recommendations for global IT vendors regarding how to circumvent policy constraints and approach customers.           

About Springboard Research

With visionaries others pursue, methods others neglect and ideas others don’t consider, Springboard Research not only seeks to lead an industry – we seek to transform it. Leveraging our pioneering research model and industry thought leaders, Springboard provides greater insight, analysis, and innovation specific to global emerging markets. Working with leading technology vendors, IT professionals, and local channels, Springboard helps our clients lead, rather than follow, market trends.

Springboard has a global presence with research centers in Australia, China, India, Japan, Malaysia, Pakistan, Singapore, the UAE, and the US. We have been acknowledged as an emerging leader and for the last three years been named a “Rising Star” in the global IT market research industry by Outsell, the leading research and advisory firm for the information industry. For more information and access to Springboard’s research, please visit www.springboardresearch.com

Media Contacts

Joyce Liu, Marketing Executive
Springboard Research
[email protected]  

Gene Cao, Senior Research Analyst, IT Services, China
Springboard Research
[email protected]

Rita Xia, Associate Research Analyst, China
Springboard Research
[email protected]
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